Freight Transport Association executives outlined the impact of falling oil prices on the freight industry during a meeting held with chief secretary to the Treasury Danny Alexander.
Chief executive Theo de Pencier and managing director of membership and policy James Hookham discussed how failing oil prices were affecting the cost of fuel and transport services, as well as equalising the cost of fuel distribution, deliveries and freight services in remote areas.
“The current low price of oil is saving businesses substantial costs; this time last year fuel represented 37 per cent of the total cost of running a 44 tonne truck, and the annualised cost for fuel for such a vehicle was £52,000,” said de Pencier. “This has now dropped to an average of approximately £43,000, which is a reduction of 18 per cent. In theory the falling cost of oil is great news for the freight industry, however, other costs often cancel those savings out.”
According to the FTA, the falling cost of a barrel of oil is being passed on ‘to an extent’ to the industry. However, fuel duty of 57.95p per litre is dampening the 53 per cent fall in bulk prices for hauliers. In addition, with oil traded in dollars. the association noted that the weaker pound was also reducing the effect of the drop in oil for UK consumers.